1
Exhibit 3B
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE:
International Corporate Center at Rye
000 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx X-000
Xxx, Xxx Xxxx 00000
SELLING AGREEMENT
AGREEMENT by and between The Manufacturers Life Insurance
Company of New York ("MLNY"), a New York Corporation; Manufacturers Securities
Services, LLC ("MSS"), a Delaware limited liability Company which is a
registered broker-dealer with the Securities and Exchange Commission under the
Securities Act of 1934 (the "1934 Act"), a member of the National Association of
Securities Dealers, Inc. ("NASD") and duly licensed and appointed with MLNY;
(Selling Broker-Dealer), also a registered broker-dealer and member of the NASD;
and (General Agent).
I. INTRODUCTION
WHEREAS, MLNY has issued certain insurance and annuity contracts, and some
of these Contracts are registered under the Securities Act of 1933 (the "1933
Act") ("Contracts" or "Contracts" collectively); and
WHEREAS, MLNY has, pursuant to an Underwriting and Distribution Agreement
dated October 7, 1997, appointed MSS as principal underwriter and exclusive
representative for the distribution of the Contracts and has authorized MSS to
enter into agreements, subject to the consent of MLNY, with Selling
Broker-Dealers and General Agents for the distribution of the Contracts; and
WHEREAS, Selling Broker-Dealer and General Agent wish to participate in the
distribution of the Contracts;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
2
II. APPOINTMENT
Subject to the terms and conditions of this Agreement, MLNY and MSS hereby
appoint ____________________________ as Selling-Broker-Dealer and
___________________________ as General Agent for the solicitation of
applications for the purchase of the Contracts, and Selling Broker-Dealer and
General Agent accept such appointment.
III. AUTHORITY AND DUTIES OF GENERAL AGENT
A. LICENSING AND APPOINTMENT OF SUBAGENTS
General Agent is authorized to appoint Sub-agents to solicit sales of the
Contracts. General Agent warrants that all Sub-agents appointed by General Agent
pursuant to this Agreement shall not solicit nor aid, directly or indirectly, in
the solicitation of any application for any Contract until that Sub-agent is
fully licensed under the applicable insurance laws, and, in connection with
securities regulated Contracts, is a fully registered representative of Selling
Broker-Dealer. General Agent shall prepare and transmit the appropriate
licensing and appointment forms to MLNY. General Agent shall pay all fees to
state insurance regulatory authorities in connection with obtaining necessary
licenses and appointments for Sub-agents. All fees payable to such regulatory
authorities in connection with the initial MLNY appointment of Sub-agents who
already possess necessary licenses shall be paid by MLNY. Any renewal license
fees due after the initial appointment shall be paid by General Agent. General
Agent shall periodically provide MLNY with a list of all Sub-agents appointed by
General Agent and the jurisdictions where such Sub-agents are licensed to
solicit sales of the Contracts. MLNY shall periodically provide General Agent
with a list which shows: 1) the jurisdiction where MLNY is authorized to do
business; and 2) any limitations on the availability of the Contracts in any of
such jurisdictions. General Agent agrees to fulfill all requirements set forth
in the General Letter of Recommendation attached as Exhibit A in conjunction
with the submission of licensing and appointment papers for all applicants as
Sub-agents submitted by General Agent.
B. REJECTION OF SUB-AGENT
MSS or MLNY may, by written notice to General Agent, refuse to permit any
Sub-agent the right to solicit applications for the sale of any of the
Contracts, require General Agent to cause any Sub-agent to cease such
solicitations or sales and cancel the appointment of any Sub-agent.
C. SUPERVISION OF SUB-AGENTS
General Agent shall supervise any Sub-agents appointed pursuant to this
Agreement to solicit sales of the Contracts and bear responsibility for all acts
and omissions of each Sub-agent. General Agent shall comply with and exercise
all responsibilities required by applicable federal and state law and
regulations. General Agent shall not be responsible for those supervisory
responsibilities belonging to Selling Broker-Dealer under applicable securities
laws which include, but are not limited to, supervising and training Sub-agents
in their capacity as registered representatives. Nothing contained in this
Agreement or otherwise shall be deemed to make any Sub-agent appointed by
General
3
Agent an employee or agent of MLNY or MSS. MLNY and MSS shall not have
any responsibility for the training and supervision of any Sub-agent or any
other employee of General Agent. If the act or omission of a Sub-agent or any
other employee General Agent is the proximate cause of any claim, damage or
liability (including reasonable attorneys' fees) to MLNY or MSS, General Agent
shall be responsible and liable therefore.
Before a Sub-agent is permitted to sell the Contracts, General Agent,
Selling Broker-Dealer and Sub-agent shall have entered into a written agreement
pursuant to which: 1) Sub-agent is appointed a Sub-agent of General Agent and a
registered representative of Selling Broker-Dealer 2) Sub-agent agrees that his
or her selling activities relating to securities regulated Contracts shall be
under the supervision and control of Selling Broker-Dealer and his or her
selling activities relating to insurance regulated Contracts shall be under the
supervision and control of General Agent; and 3) that Sub-agent's right to
continue to sell such Contracts is subject to his or her continued compliance
with such agreement and any procedures, rules or regulations implemented by
Selling Broker-Dealer or General Agent.
IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
A. SUPERVISION OF REGISTERED REPRESENTATIVES
Selling Broker-Dealer agrees that it has full responsibility for the
training and supervision of all persons, including Sub-agents of General Agent,
associated with Selling Broker-Dealer who are engaged directly or indirectly in
the offer or sale of securities regulated Contracts. All such persons shall be
subject to the control of Selling Broker-Dealer with respect to their securities
regulated activities. Broker-Dealer shall: 1) train and supervise Sub-agents, in
their capacity as registered representatives, in the sale of securities
regulated Contracts; 2) use its best efforts to cause such Sub-agents to qualify
under applicable federal and state laws to engage in the sale of securities
regulated Contracts; 3) provide MLNY and MSS to their satisfaction, with
evidence of Sub-agents' qualifications to sell securities regulated Contracts;
and 4) notify MLNY if any of such Sub-agents ceases to be a registered
representative of Selling Broker-Dealer. Selling Broker-Dealer agrees that a
Sub-agent must be a registered representative of Selling Broker-Dealer before
engaging in the solicitation of any securities regulated Contracts and have
entered into the written agreement more fully described in Section III,
Paragraph C. MLNY and MSS shall not have any responsibility of the supervision
of any registered representative or any other employee or affiliate of Selling
Broker-Dealer. If the act or omission of a registered representative or any
other employee or affiliate of Selling Broker-Dealer is the proximate cause of
any claim, damage, or liability (including reasonable attorneys' fees) to MLNY
or MSS, Selling Broker-Dealer shall be responsible and liable therefore. Selling
Broker-Dealer shall fully comply with the requirements of the NASD and of the
1934 Act and all other applicable federal or state laws.
Selling Broker-Dealer shall establish such rules and procedures as may be
necessary to cause diligent supervision of the securities activities of the
Sub-agents. Upon request of MSS, Selling Broker-Dealer shall furnish such
records as may be necessary to establish diligent supervision.
4
V. AUTHORITY AND DUTIES OF GENERAL AGENT AND SELLING
BROKER-DEALER
A. CONTRACTS
The securities and insurance regulated Contracts issued by MLNY to which
the Agreement applies are listed in Schedule I, which may be amended from time
to time by MLNY. MLNY, in its sole discretion with prior or concurrent written
notice to Selling Broker-Dealer and General Agent, may suspend distribution of
any Contracts. MLNY also has the right to amend any Contracts at any time.
B. SECURING APPLICATIONS
Each application for a Contract shall be made on an application form
provided by MLNY, and all payments collected by Selling Broker-Dealer, General
Agent or any registered representative and Sub-agent shall be remitted promptly
in full, together with such application form and any other required
documentation, directly to MLNY at the address indicated on such application or
to such other address as may be designated. Selling Broker-Dealer and General
Agent shall review all such applications for completeness. Check or money order
in payment of such Contracts should be made payable to the order of "The
Manufacturers Life Insurance Company of New York." All applications are subject
to the acceptance or rejection by MLNY in its sole discretion.
C. RECEIPT OF MONEY
All money payable in connection with any of the Contracts whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or anyone else having an interest in the Contracts, is the
property of MLNY and shall be transmitted immediately in accordance with the
administrative procedures of MLNY without any deduction or offset for any reason
including but not limited to, any deduction or offset for compensation claimed
by Selling Broker-Dealer or General Agent, unless there has been a prior
arrangement for net wire transmissions between MLNY and Selling Broker-Dealer or
General Agent.
D. NOTICE OF SUB-AGENT'S NONCOMPLIANCE
Selling Broker-Dealer shall notify MSS and General Agent in the event a
Sub-agent fails or refuses to submit to the supervision of Selling Broker-Dealer
or General Agent in accordance with this Agreement, the agreement between
Selling Broker-Dealer, General Agent and Sub-agent referred to in Section III,
Paragraph C and Section IV, Paragraph A, or otherwise fails to meet the rules
and standards imposed by Selling Broker-Dealer or its registered representatives
or General Agent or its Sub-agents. Selling Broker-Dealer or General Agent shall
also immediately notify such Sub-agent that he or she is no longer authorized to
sell the Contracts, and both Selling Broker-Dealer and General Agent shall take
whatever additional action may be necessary to terminate the sales activities of
such Sub-agent relating to the Contracts.
E. SALES PROMOTION, ADVERTISING AND PROSPECTUSES
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer, General
Agent or any Sub-agents unless the specific item has been approved in writing by
MLNY prior to use. Selling Broker-Dealer shall be provided, without any expense
to Selling
5
Broker-Dealer, with prospectuses relating to securities regulated Contracts.
Selling Broker-Dealer and General Agent shall be provided with such other
material as MLNY determines necessary or desirable for use in connection with
sales of the Contracts. Nothing in these provisions shall prohibit Selling
Broker-Dealer or General Agent from advertising life insurance and annuities on
a generic basis.
VI. COMPENSATION
A. COMMISSIONS AND FEES
Commissions and fees payable to Selling Broker-Dealer or General Agent in
connection with the securities regulated Contracts shall be paid by MSS to
Selling Broker-Dealer or General Agent, or as otherwise required by law.
Commissions and fees payable to Selling Broker-Dealer, General Agent or
Sub-agent in connection with the insurance regulated Contracts shall be paid by
MSS to Selling Broker-Dealer or General Agent, or as otherwise required by law.
Selling Broker-Dealer or General Agent, as applicable, shall pay Sub-agent. MSS
will provide Selling Broker-Dealer and General Agent with a copy of its current
Contracts, Commissions and Fees Schedule. Unless otherwise provided in the
Contracts, Commissions and Fees Schedule, commissions will be paid as a
percentage of premiums or purchase payments (collectively, Payments) received in
cash or their legal tender and accepted by MLNY on applications obtained by the
various Sub-agents appointed by General Agent hereunder. Upon termination of
this Agreement, all compensation to the Selling Broker-Dealer and General Agent
hereunder shall cease. However, Selling Broker-Dealer and General Agent shall be
entitled to receive compensation for all new and additional premium payments
which are in process at the time of termination, and shall continue to be liable
for any chargebacks pursuant to the provisions of said Contracts, Commissions
and Fees Schedule, or any other amounts advanced by or otherwise due MSS or MLNY
hereunder. No commission shall be paid in excess of the limits of Section 4228
of the New York Insurance Law and no expense allowance payment shall be made in
excess of the amount approved for payment by Manufacturers Life Insurance
Company of New York pursuant to New York Insurance Department Regulation No. 49.
B. TIME OF PAYMENT
MSS will pay any commissions due General Agent or Selling Broker-Dealer
hereunder within fifteen (15) days after the end of the calendar month in which
Payments upon which such commission is based are accepted by MLNY.
C. AMENDMENT OF SCHEDULES
MSS and MLNY may, upon at least ten (10) days' prior written notice to
Selling Broker-Dealer and General Agent, change the Contracts, Commissions and
Fees Schedule by written amendment of such Schedule. Any such change shall apply
to compensation due on applications received by MLNY after the effective date of
such by MLNY after the effective date of such notice.
D. PROHIBITION AGAINST REBATES
MSS or MLNY may terminate this Agreement if Selling Broker-Dealer, General
Agent or any Sub-agent of General Agent rebates, offers to rebate or withholds
any part of any Payments on the Contracts. If Selling Broker-Dealer, General
Agent or any Sub-agent of General Agent shall at any time induce or endeavor to
induce any owner of
6
any Contract issued hereunder to discontinue payments or to relinquish any such
Contract, except under circumstances where there is reasonable grounds for
believing the Contract is not suitable for such person, anyand all compensation
due Selling Broker-Dealer or General Agent here under shall cease and terminate.
E. INDEBTEDNESS AND RIGHT OF SET OFF
Nothing contained in this Agreement shall be construed as giving Selling
Broker-Dealer or General Agent the right to incur any indebtedness on behalf of
MSS or MLNY. Selling Broker-Dealer and General Agent hereby authorize MSS to set
off liabilities of Selling Broker-Dealer and General Agent to MSS or MLNY
against any and all amounts otherwise payable to Selling Broker-Dealer or
General Agent.
VII. GENERAL PROVISIONS
A. WAIVER
Failure of any party to insist upon strict compliance with any of the
conditions of the Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed to be, or shall constitute,
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
B. LIMITATIONS
No party other than MLNY shall have the authority to 1) make, alter, or
discharge any Contract issued by MLNY; 2) waive any forfeiture or extend the
time of making any Payments; or 3) enter into any proceedings in a court of law
or before a regulatory agency in the name of or on behalf of MLNY. No party
other than MSS and MLNY, respectively, shall have the authority to: 1) alter the
forms which MSS or MLNY prescribe, or substitute other forms in place of those
prescribed by MSS; or 2) enter into any proceeding in a court of law or before a
regulatory agency in the name of or on behalf of MSS.
C. FIDELITY BOND AND OTHER LIABILITY COVERAGE
Selling Broker-Dealer and General Agent hereby assign any proceeds received
from a fidelity bonding company, error and omissions or other liability
coverage, to MLNY or MSS as their interest may appear, to the extent of their
loss due to activities covered by the bond, policy or other liability coverage.
If there is any deficiency amount, whether due to a deductible or otherwise,
Selling Broker-Dealer or General Agent shall promptly pay such amounts on
demand. Selling Broker-Dealer and General Agent hereby indemnify and hold
harmless MLNY and MSS from any deficiency and from the costs of collection
thereof (including reasonable attorneys' fees).
D. BINDING EFFECT
This Agreement shall be binding on and shall insure to the benefit of the
parties to it and their respective successors and assigns provided that neither
Selling Broker-Dealer nor General Agent may assign this Agreement or any rights
or obligations hereunder without prior written consent of MLNY.
E. REGULATIONS
All parties agree to observe and comply with the existing laws and rule or
7
regulations of applicable local, state or federal regulatory authorities and
with those which may be enacted or adopted during the term of this Agreement
regulating the business contemplated hereby in any jurisdiction in which the
business described herein is to be transacted.
F. INDEMNIFICATION
1) MSS agrees to indemnify and hold harmless Selling Broker-Dealer and
General Agent, their officers, directors and employees, against any and all
losses, claims, damages or liabilities to which they may become subject under
the 1933 Act, the 1934 Act, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Manufacturers Investment Trust
("Trust") filed pursuant to the 1933 Act, or any prospectus included as a part
thereof, as from time to time amended and supplemented. MSS agrees to indemnify
and hold harmless Selling Broker-Dealer and General Agent, their officers,
directors and employees, against any and all losses, claims, damages or
liabilities to which they may become subject under the 1933 Act, the 1934 Act,
or other federal or state statutory law or regulation, at common law or
otherwise insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission to state
a material fact required to be stated or necessary to make the statements made
not misleading in any advertisement or sales literature approved in writing by
MLNY pursuant to Section V, Paragraph E of this Agreement. 2) Selling
Broker-Dealer and General Agent agree to indemnify and hold harmless MSS and
MLNY, their officers, directors, and employees, against any and all losses,
claims, damages or liabilities to which they may become subject under the 1933
Act, the 1934 Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of liabilities (or actions in respect
thereof) arise out of or are based upon: a) any oral or written
misrepresentations by Selling Broker-Dealer or General Agent or their officers,
directors, employees or agents unless such misrepresentation is contained in the
registration statement for the Contracts or Trust shares, any prospectus
included as a part thereof, as from time to time amended and supplemented, or
any advertisement or sales literature approved in writing by MLNY pursuant to
Section V, Paragraph E, of this Agreement, or b) the failure of Selling
Broker-Dealer or General Agent or their officers, directors, employees or agents
to comply with any applicable provisions of this Agreement.
G. NOTICES
All notices or communications shall be sent to the address shown in this
Agreement, or to such other address as the party may request, by giving written
notice to the other parties.
H. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York.
8
I. AMENDMENT OF AGREEMENT
MLNY reserves the right to amend this Agreement in writing at any time. The
submission of an application for the Contracts by Selling Broker-Dealer or
General Agent five or more business days after notice of any such amendment has
been sent to the other parties shall constitute agreement to such amendment.
J. GENERAL AGENT AS BROKER-DEALER
If Selling Broker-Dealer and General Agent are the same person or legal
entity, such person or legal entity shall have the rights and obligations
hereunder of both Selling Broker-Dealer and General Agent and this Agreement
shall be binding and enforceable in both capacities.
K. COMPLAINTS AND INVESTIGATIONS
General Agent, Selling Broker- Dealer and MSS agree to cooperate fully in
the event of any regulatory investigation, inquiry or proceedings, judicial
proceedings or customer complaint involving the Contracts. In furtherance of the
foregoing: 1) each party will notify all other parties of any such
investigation, inquiry, proceedings or complaint involving the Contracts or
affecting the ability of a party to perform pursuant to this Agreement within 10
days of obtaining knowledge of the same; and 2) in the case of a customer
complaint the involved parties will consult with each other prior to sending any
written response with respect to such complaint.
L. TERMINATION
This Agreement may be terminated without cause, by any party upon thirty
(30) days' prior written notice; and may be terminated, for cause, by any party
immediately; and shall be terminated as respects securities regulated Contracts
if MSS or Selling Broker-Dealer shall cease to be a registered broker-dealer
under the Securities Exchange 1934 Act and a member of the NASD.
ADDRESS FOR NOTICES
For The Manufacturers Life Insurance Company of New York:
International Corporate Center at Rye
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X-000
Xxx, XX 00000
9
For Manufacturers Security Services, LLC: ------------------------------------
------------------------------------
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
For General Agent:
------------------------------------
For Selling Broker-Dealer: ------------------------------------
--------------------------------------- ------------------------------------
--------------------------------------- ------------------------------------
This Agreement shall be effective upon execution by General Agent and Selling
Broker-Dealer, and delivery of the Agreement to MSS.
Manufacturers Securities Services, LLC by
The Manufacturers Life Insurance
Company of North America, Managing
Member, By: Dated:
------------------------------
/s/ Xxxxxxx Xxxxxx
--------------------------------------- ------------------------------------
Xxxxxxx Xxxxxx, VP Treasurer & CFO (General Agent)
By:
---------------------------------
(Name and Title)
The Manufacturers Life Insurance Company ------------------------------------
of New York, By: (Selling Broker-Dealer)
/s/ Xxxxxx X. Xxxxx By:
--------------------------------------- ------------------------------------
Xxxxxx X. Xxxxx, President (Name and Title)
10
EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
General Agent hereby certifies to MLNY that all of the following
requirements will be fulfilled in conjunction with the submission of
licensing/appointment papers for all applicants as Sub-agents submitted by
General Agent. General Agent will, upon request, forward proof of compliance
with same to MLNY in a timely manner.
1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identity, residence and business reputation and declare that
each applicant is personally known to us, has been examined by us, is known to
be of good moral character, has a good business reputation, is reliable, is
financially responsible and is worthy of a license. Each individual is
trustworthy, competent and qualified to act as an agent for MLNY to hold himself
or herself out in good faith to the general public. We vouch for each applicant.
2. We have on file a X-000, X-000 or U-4 form which was completed by each
applicant. We have fulfilled all the necessary investigative requirements for
the registration of each applicant as a registered representative through our
NASD member firm, and each applicant is presently registered as an NASD
registered representative. The above information in our files indicates no fact
or condition which would disqualify the applicant from receiving a license and
all the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state in which each applicant is requesting a license, and that all
such persons have fulfilled the appropriate examination, education and training
requirements.
4. If the applicant is required to submit his or her picture, signature,
and securities registration in the state in which he or she is applying for a
license, we certify that those items forwarded to MLNY are those of the
applicant and the securities registration is a true copy of the original.
5. We hereby warrant that the applicant is not applying for a license with
MLNY in order to place insurance chiefly and solely on his or her life or
property, lives or property of his or her relatives, or property or liability of
his or her associates.
6. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of all or any risks
written by these applicants, to the end that the insurance interest of the
public will be properly protected.
7. We will not permit any applicant to transact insurance as an agent until
duly licensed therefore. No applicants have been given a contract or furnished
supplies, nor have any applicants been permitted to write, solicit business, or
act as an agent in any capacity, and they will not be so permitted until the
certificate of authority or license applied for is received.
8. We certify that the General Agent, Selling Broker-Dealer and applicant
shall have entered into a written agreement pursuant to which: a) applicant is
appointed a Sub-agent of General Agent and a registered representative fee
Selling Broker-Dealer; b) applicant agrees that his or her selling activities
relating to securities regulated Contracts shall be under the supervision and
control of Selling Broker-Dealer and his or her selling activities relating to
insurance regulated Contracts shall be under the supervision and control of
General Agent; and c) that applicant's right to continue to sell such Contracts
is subject to this or her continued compliance with such agreement and any
procedures, rules or regulations implemented by Selling Broker-Dealer or General
Agent.
